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Transcript of 43da0Module 2 AMIZONE
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Amity School of Business
BBA V Semester
Sales and Distribution Management
Module-2Sales Organization
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Concepts of Sales Organization
A sales organization is a structuralbody through which the functions
of Sales management are carriedout.
This assists the sales manager tocarry out needed tasks efficientlyand effectively to achieve results
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Nature of Sales Organization
An organization is simply anarrangement of activities involving agroup of people. The goal is toarrange these activities so that the
people involved can act bettertogether than they can individually.
Trend is towards a flatter organizationin which coordination across activitiesis more important than top down
control. Salespeople are more often a part of
the cross functional team design toserve specific customers.
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Purpose of Sales Organization
To permit the development of specialists
To ensure that all necessary activities areperformed
To achieve coordination
To define authority
To economize on executive time
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Functions of Sales Organization
Planning Function
Sales Forecasting
Sales Budgeting
Selling Policy
Administrative Function
Selecting Salesmen
Training Salesmen
Control of Salesmen
Executive Function
Sales Promotion
Selling Routine : Execution ofcustomers orders
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Principles of Sales Organization
Degree of centralization
Degree of specialization
Line and Staff positions
Marketing orientation
Effective coordination
Span of control
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Setting up a Sales Organization
Defining the objectives
Delineating the necessary activities
Grouping the activities into Jobsand Positions
Assigning Personnel to positions
Providing for coordination and
control
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Basic Types of Sales Organizations
Sales organizations are generallyclassified into four basic types:
Line Organization Line and Staff Organization
Functional Organization
Horizontal Organization
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Line Organization
HeadMarketing
Sales
Manager
Area SalesManager1
Area SalesManager3
Area SalesManager2
Area SalesManager4
salespeople salespeople salespeople salespeople
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Line and Staff Organization
Head-Marketing
Marketing Research
Manager
Sales ManagerPromotional
Manager
Customer ServiceManager
Area SalesManager-1
Area SalesManager-1
Area SalesManager-1
Salespeople Salespeople Salespeople
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Functional Organization
Head-Marketing
Marketing ResearchManager
PromotionalManager
Customer ServiceManagerSales Manager
Area Sales Manager #4
Salespeople
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Horizontal Organization
Research & DesignTeam:
CustomerResearch
Product / ServiceDesign
Planning Team:Strategic PlanningAccounts, FinanceHR, Administration
Chief OperationOfficer
Operations Team:
Production /OperationsQuality AssuranceSystemsEngineering
Customer SupportTeam:InformationServiceTraining
CustomerSatisfaction Team:Sales & MarketingPricing,
PromotionChannels,Logistics
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Specialization within Sales Organization
Needed to increase effectiveness of sales force
Done by expanding basic sales organization
Basis of specialization
Geography
Type of product Market
Combination of above
Criteria for selection
(1) nature of product,
(2) sales force abilities,
(3) demands of selling job,
(4) customer and market facts
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Geographic Specialization
Head-Marketing
Marketing ResearchManager
General Sales
Manager PromotionManager
Customer Service
Manager
Branch Sales
Manager-1
Branch Sales
Manager-2
Branch Sales
Manager-3
Branch Sales
Manager-4
Salespeople Salespeople Salespeople Salespeople
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Used when the companyhas many products and /or brands
Two types of productspecialization (x). Sales organization with
product specialized salesforce
(y). Sales organization withproduct managers as staffspecialists
Product Specialization
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Head-Marketing
Marketing ResearchManager
GeneralSales Manager
Sales TrainingManager
PromotionManager
Area Sales ManagersProduct Group A
Area Sales ManagersProduct Group B
SalespeopleProduct Gr. A
SalespeopleProduct Gr. B
Fig. X Sales Organization with Product Specialized Sales force
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Fig. y Sales Organization with Product Managers as Staff
Specialists
Head-Marketing
Marketing ResearchManager
PromotionManager
Product ManagerProduct Gr. B
Product ManagerProduct Gr. A
GeneralSales Manager
Area SalesManagers
Salespeople
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Market Specialization
General SalesManager
Sales Manager-International-
Markets
Sales Manager-Commercial
Sales Manager-Consumer Markets
Sales Manager-Government
Area Sales Mgrs
International
Sales Executives
Area Sales Manager-
Commercial
Salespeople
Area Sales Manager-
Government
Salespeople
Area Sales Mgrs-
Consumer Markets
Salespeople
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Combination Sales Organization
Director Sales& Marketing
General Manager
Sales - North
General Manager
Sales - East
General Manager
Sales - South
General Manager
Sales - West
Regional SalesMgr. Govt.
Regional SalesMgr. - Dealers
Regional SalesMgr. - Commercial
Salespeople Salespeople Salespeople
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Emerging Organizational Design
Agency and Distribution Selling
Independent private businesses
Contractual agreement with the selling organization
Payment is based on commission
Salespeople have less specialized knowledge about theproduct and company
Companys sales force policy is flexible
Shared Sales Force
Divides the sales force among the number of divisions orproduct lines of an organization to reduce
Operating cost
Increased efficiency
Achieve synergy
Achieve economies of scope
Puts additional pressure on the salesperson tocoordinate and monitor customers, competitors,product features, other departments people
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Coordination of Personal Sellingwith other Marketing Activities
Sales and Advertising
Work towards same objective of profit
maximization
Activities of sales force are planned and directedalong lines that increase advertising effectiveness
Advertising is geared up as and when required soas to assist the salespeople
Sales and Marketing Information
Marketing information system assist the salesdepartment by gathering data needed for
analyzing sales problems, assisting in determiningsales potential, measuring the effectiveness of thesales effort
Sales department provides the information systemwith many of the raw statistics and other
information needed for sales and market analysisand forecasting.
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Coordination of Personal Sellingwith other Departments
Sales and Production
Sales and R&D
Sales and HR
Sales and Finance Sales and Accounting
Sales and Purchasing
Sales and Public Relations
Sales and Legal
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Sales Forecasting
What is Sales Forecasting?
It is an estimate of sales during a specifiedfuture period which is tied to a proposed
marketing plan and which assumes a particularset of uncontrollable and competitive forces
-Cundiff and Still
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Importance of Sales Forecasting
Helps manufacturing department forsetting up production capacity andplanning production
Finance department for raising cash forinvestment and operations as well as forprofit planning
Purchase function for planning theirpurchases
HR function to help them plan for
manpower planning
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Factors Influencing the Sales Forecast
Marketing Plans Changes in price structure, channels of
distribution, promotional plans, productsmay influence the future sales.
Conditions within the industry Competitor policies and new entrants
into the market needs to be taken intoconsideration.
Market Conditions Awareness about the changes in the
primary demand for the industrys output.
General Business Conditions General state of the economy
Types of Sales Forecast
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Types of Sales Forecast
Product Level All Sales
Industry Sales
Company Sales
Product Line Sales
Product Variant Sales
Product Item Sales
Time Period Long Term Medium Term
Short Term
Geographic Area
World Nation
Region
Territory
Customer
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Terms Used in Forecasting
Market Potential
Maximum possible sales opportunitiespresent in a particular marketsegment and open to all sellers duringa stated future period.
Market Forecast
Expected industry sales for a givenproduct or service at one specificlevel of industry marketingexpenditure, in a given market, for aspecific period of time.
Company Sales Potential Best possible estimated sales of a
given product or service for acompany in a given geographic
area for a specific period of time.
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Company Sales Forecast Estimated company sales of a given product or
service, under a proposed marketing plan, in agiven market, for a specific period of time.
Sales Budget It is a detailed schedule showing the expected
sales for the budget period; typically, it isexpressed in both revenues and units ofproduction.
Sales budget is used for making purchasing,production, manpower and cash flowdecisions.
Sales QuotaIndividual sales target figure assigned
to each sales unit such a sales person, dealer,distributor, region, or territory, as a requiredminimum for a specified period (month,quarter, year).
Sales quotas may be expressed either incurrency figures (monetary terms) or in number
of goods or services sold (volume terms).
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Sales Forecasting Methods
Qualitative Methods Quantitative Methods
Executive opinion Moving averages
Delphi method Exponential smoothing
Sales force composite Decomposition
Survey of buyersintentions
Naive / Ratio method
Test marketing Regression analysis
Econometric analysis